Machka 

An expensive bicycle is a toy ... a hobby ... not a necessity.

You save the money ... and then, when you have enough, you buy the bicycle.

znomit

You stole a Trek?

merlinextraligh

You've got to distinguish how you can pay it off. If you have the cash in savings to pay it off, without compromising other financial priorities ok. (but again you've got to balance the hassle factor against the very small return you earn at today's rates)

But if you mean you can pay it off in payments over the 12 months from income you anticipate you will earn in the 12 months, then there's a problem. Whenever you spend money you don't have, banking on anticipated future income, you're taking a risk, and most any financial planner is going to tell you that's a bad idea for a completely unecessary purchase. What happens if you lose your job in that period?

Last, your assumption that you will lose only a little money is incorrect. The interest typically goes back to day 1, at rates around 24% so if your still paying for it 13 months later, you easily end up paying 150% of the bike original purchase price before you pay it off, depending on how long you take.

i_live_in_sf

I think your math's a bit off here: Purchasing a $3k bike at 24% interest paid off over 12 months only pays a total of $404 in interest - or 113% of the total purchase price. A more realistic cc rate of 9% would only pay $148 extra over 12 months.

EDIT: Never mind, i saw that you qualified that number with: depending on how long you take

merlinextraligh

The 24% is realistic for 0% deals. That's part of the problem. Most people can probably get a 9% rate, and many even lower. The 12 month deals have the absurdly high rate on the back end, and no one objects to it because they intend to pay it off in the promotional period.

Elduderino2412

If you are young with little credit 24.99% is a pretty common rate, but if you are decent w/money it shouldn't matter w/all the 0% introductory APR cards.

LowCel 

In December I purchased a Tag watch using 0% for a year. I knew going in that if I did not pay it off by this December I would be hit with the full interest. I am NOT willing to do that. I am paying the watch off in a couple of days. 0% deals are great as long as you know you can pay them off. If you are not completely sure then you are going to get screwed. I've done it wrong enough in the past that I am finally starting to learn from my mistakes.

cmschmie

For my first bike, I really wanted it, so I financed it through the store. Worked with no issues.

For my second bike, our company had a good year and I got a pretty good bonus. I took a portion of that and put it aside for the bike. Paid with the CC for the points and paid it off on the next bill.

AInscho

So true. You can't really afford the bike you are looking at if you ask about financing. I would strongly suggest saving up cash in hand. But if you must have the "i need it right now" mindset finance as little and as low as you can. In other words think cheap at a low rate. This is how credit cards get a bad rap. I have 1 credit card I pay off every month for goods/services I would use anyways such as gas and food. For my bike I had to save up money that I did not need.

btw with a little savings and some smart planning its not hard to make $5,000 in a year. Why not go in with the mindset of saving and getting a good deal on last years model? just a thought.

Brand00d

[QUOTE=merlinextraligh;15886787
Last, your assumption that you will lose only a little money is incorrect. The interest typically goes back to day 1, at rates around 24% so if your still paying for it 13 months later, you easily end up paying 150% of the bike original purchase price before you pay it off, depending on how long you take.[/QUOTE]


I didnt know this. I thought that say you spent 13 months instead of 12 months at 0% apr untill the 13 month hit and you finished then i thought youd olny say.. pay 24% or so Intrest on the remaining balance? is that not how it works?

Phil_gretz

I'm waiting on the neurological or physiological proof that this urban myth is true.

merlinextraligh

Read your contract, but the typical deal is structured so that interest is accruing on the outstanding balance at the 24% rate. That interest is forgiven if the full amount is paid within the promotional period. If you don't pay in full, all that interest that had been accruing is then added to the balance due.

So, say you have $200 left to pay on a $2500 purchase, you owe interest on the full amount that was outstanding each month, ( so 2% of $2500, then 2% of whatever the balance was in the second month, etc.)

Assuming you've almost paid it off, but miss the final payment, it's going to work out roughly around 24% of half the original balance.

merlinextraligh

With the bike, at least your left with a bike. With the hooker, you may be left with something less pleasant.

kingsqueak

I waited until my toy budget made sense and I could flat pay for whatever I wanted, then pulled the trigger.

"Afford" should not include carrying debt. It took me a long time to get to a point where my mortgage was the only debt I was carrying and it was worth the struggle. I hate that I even owe on my house, it's a financial prison when you owe people.

I just finished clicking away to pay off the bike and accessories I just got, and it was great to know I'm not carrying debt over a toy purchase. It took a while to get to a point where I could do this, but it was worth it.

jerrycan42

I buy and sell bikes/bike parts to finance the bikes I own/keep/ride... Currently up $1600+ and own 2 road bikes (Cannondale R1000D and a Norco CRR2) and an MTB (Kona Cindercone)

Bluechip

I just remembered that on my first nice bike I used the layaway plan. It was an SR400 Cannondale back in '85. Total cost was $400. That was a lot back then. I think it took me 2-3 months to pay it off. I liked the numbering system Cannondale used back then too. SR400 was $400, the SR900 was $900. At least that's how I remember it. I don't think it would work nowadays. Cannondale SuperSix Evo 13310.

seymour1910

lol...and the CAAD line would be worse imagine instead of CAAD10-5 you have CAAD 1750

JoelS

I use cash. No muss, no fuss. Sometimes that means I need to save, for a long time. But it's the best way.

sheepdog84

if you can turn a wrench, find the frame you want and part it out over time using cash the whole way.

AdelaaR

I agree.

Will Goes Boing

For most retail stores or GE financing for the "0% interest", if you read the SMALL SMALL fine prints, you will see that if you miss a payment, are late on a payment, or don't pay off the full balance by the 6 (or 12 month) time period.... ALL THE INTEREST ACCRUES at a giant whopping rate of 24.99% (or whatever crazy high amount).

So if you don't pay it off in time, or you accidentally miss a payment, you're taking it up the behind with sand as lube. I take it you're a younger guy and is new to this financing stuff, but I am telling you that you can get screwed BIG TIME.

Brand00d

Yea im younger. I have a decent bike .. i just want a more..decent..bike. Im currently financing some things. Its a good thing you guys informed me about all these PLOYS. GG Im just going to keep saving and atleast deposit half cash and finance the rest If I dont have enough saved by next spring.

Machka 

Why not try this technique ...

1. Get an extra part-time job

2. Save up all the money

3. Finance nothing